Brighton and Hove is England’s most populous seaside city. Over the past decade, the East Sussex seaside resort of Brighton has witnessed one of the fastest house price growths in the UK mainly due to its seaside charm and proximity to London. If you are moving in Brighton, you must know some basic facts about remortgages, mortgages, home buying, property and moving in Brighton. In this article, we have focussed on the advantages of remortgaging.
More and more people in the UK are opting for remortgage to save money. Remortgaging involves switching current mortgage for a new deal either with the current lender or with a new lender. In today’s competitive market, remortgaging makes a lot of sense for the borrowers because it allows them to switch their mortgage plan every few years in order to take advantage of new offers and more competitive rate of interest.
The process of remortgaging is relatively easy. However bear in mind that your current mortgage plan may carry penalties if you try to repay and opt out early. Then again, there would probably be costs associated with the new deal. So take all these factors into consideration and opt for remortgage if you can save a substantial amount of money over and above these costs.
Search the market and you will come across many loan provider companies offering remortgage at competitive rates. Here are some terms you should be familiar with if you plan for a remortgage. These will help you decide on the right mortgage deal based on your circumstances.
Capped rate: A capped rate mortgage offers the security of a fixed rate mortgage as also the chance of benefiting from any fall in mortgage rates within the capped rate period. On the negative side, rates are often higher than on lenders’ comparable fixed products, and the initial term seldom lasts longer than two or three years.
Discount rate: With a discount rate mortgage, you can take advantage of a reduction of a given amount on the lender’s SVR. Bear in mind that if the rate changes, the rate you pay will also change accordingly. After the discount finishes, the loan reverts in most cases to the lender’s SVR.
Standard variable rate (SVR): Some lenders may offer an initial promotional rate to attract borrowers. Once this term comes to an end, the loan is then transferred to the lender’s standard rate of interest, which goes without saying, is much higher than the promotional rate of interest. This is why borrowers who have taken advantage of the lower rate of interest prefer to switch loans when the lower interest terms comes to an end.
Fixed rate: Here, you can avail of a remortgage loan at a fixed rate of interest stretched over a predetermined period. Once this period is over, the loan usually reverts to the SVR. The advantage of a fixed rate mortgage is that you know how much you would have to pay over a period of time and this allows you to budget more easily. The catch is that repayments may prove more expensive later on, depending on how interest rates move over the period of the fixed rate.
Tracker: These mortgages move in tune to the Bank Base Rates. If the bank base rate goes down, the rate of interest of your mortgage will also go down and vice versa.
Cashback: A cashback mortgage means that you are paid an upfront lump sum which you can use to furnish your home or repay your debts etc. The rate paid is most often the lender’s SVR.
